Back-to-school shoppers expected to flock to discount stores

Tuesday

Jul 29, 2008 at 12:01 AMJul 29, 2008 at 5:48 AM

Expect to see longer lines at dollar stores and discount retailers for back-to-school shopping this year. That’s what shoppers are telling big retail consulting firms such as Deloitte and the National Retail Federation, groups that each year interview consumers about their spending habits during peak times like holidays.

That’s what shoppers are telling big retail consulting firms like Deloitte and the National Retail Federation, groups that each year interview consumers about their spending habits during peak shopping times like holidays.

Both organizations say shoppers will be frequenting dollar and discount stores in attempts to stretch their budgets even further during a tough economy. Shoppers say increased fuel and food costs are the biggest factors causing them to cut back.

Seventy percent of Illinois respondents plan to spend less on back-to-school items this year and 40 percent plan to reduce their household spending by more than $100, according to the Deloitte study. A whopping 91 percent said they plan to change the way they shop this year.

“This is not a year of wants for the consumers,” said Gary Levin, a partner in Deloitte’s retail group. “Consumers are spending to meet their needs, on the basics like housing, food and fuel. Some of the wants are being absorbed by rising costs” elsewhere in the family budget.

But the National Retail Federation estimates the average family with school-aged children will still spend $594.24 on back-to-school purchases, up from $441.60 in 2002. That includes purchases like clothing, shoes, electronics and school supplies.

Total back-to-school spending for kindergarten through 12th grade is estimated to reach $20.1 billion.

Levin expects apparel will see the biggest hit, and parents will recycle or reuse school supplies from last year when they can. He said consumers likely will plan their shopping trips after consulting advertisements and coupon books for the best deals and drive to strip malls and shopping centers where they buy from several outlets to save gas money.

Family Dollar has eight locations in Rockford, and Josh Braverman, the company’s public relations manager, said stores have seen an increase in traffic recently because of people spending their economic stimulus checks.

“Back-to-school is certainly an important time of the year, no matter what the economic environment,” he said. “In this economy, it’s even more so.”

The company has nearly 6,600 stores in 44 states, and officials are seeing more requests from residents wanting to see stores built in their communities. Braverman noted that the stores carry name-brand, first-run products, not secondhand or discontinued items.

Back-to-school time marks a big advertising push for Family Dollar. Braverman said a back-to-school book is going out to consumers Aug. 11 and will highlight deals beyond notebooks and pens, such as computer desks, apparel, snacks and items like towels for college students moving into dorms.

Levin said retail outlets will have the best luck luring shoppers in with incentives and last-minute deals similar to tactics used during the holiday season.

And speaking of holidays, the spending changes expected for back-to-school shopping have retailers worried about Christmastime spending compared to last year.

“Retailers are nervous right now about the holiday season more so than before,” Levin said. “They’re waiting for that snap in consumer confidence, and so far, we’re not seeing that. If unemployment continues to rise, that’s just adding fuel to the fire.”

Melissa Westphal can be reached at (815) 987-1341 or mwestpha@rrstar.com.

Illinois numbers

79 percent will buy more back-to-school items on sale
Nearly 70 percent will buy only what the family needs
70 percent will buy lower-priced items
57 percent will use more store coupons
47 percent will shop at less expensive stores than usual
44 percent will put off buying certain items as long as possible
25 percent will research more products online to find the best price
Source: Deloitte